Friday 28 November 2008 19.01 EST
First published on Friday 28 November 2008 19.01 EST

The Liberal Democrats' biggest donor became one of Britain's most wanted men yesterday after being convicted in his absence of stealing almost £8m from the former chairman of Manchester United.

Michael Brown, 42, who skipped bail before the trial, posed as an international bond dealer, pretended his father was a peer, and promised investors huge returns of up to 50%. His numerous lies - including claims he had clients vetted by US embassy officials and Special Branch before accepting their money - helped him deceive Martin Edwards, who was chairman of Manchester United from 1980 until 2002. Edwards, like most of Brown's victims, did not realise he was entrusting his money to someone who had not even passed his maths O-level.

The conman boasted of regular meetings with Prince Andrew at Buckingham Palace and claimed to have been educated at Gordonstoun, which counts Prince Charles among former pupils. Altogether Edwards and others gave the Glasgow-born businessman £36m, of which a record £2.4m was donated to the Lib Dems' 2005 election war chest. The donations, handed over in 2005 before that year's general election when Charles Kennedy was leader, added to Brown's aura of influence.

In evidence, Edwards said he was taken in by Brown's claims: "He said he had been in bond trading for a number of years and had experience. He said he had a number of bonds that he ran, and showed us paperwork which showed they were successful. He also said his father was a lord and referred to political connections as well."

But there was no trading at all. Brown used the money to pay illusory profits to other investors and spent much of the rest on himself. As his scheme began to unravel, he made several attempts to avoid prosecution, and claimed he was dying before eventually offering to pay back millions of pounds to Edwards if he withdrew charges against him.

After his arrest he continued to protest his innocence. But the jury at Southwark crown court decided Brown was lying and unanimously convicted him in his absence on four counts: two thefts, one of furnishing false information and one of perverting the course of justice between February 9 2005 and April 17 2006.

After the verdict the judge invited Martin Edmunds QC, prosecuting, to tell the jury about Brown's previous convictions and how he had twice skipped bail.

The court had earlier been told that Brown first rented a £49,000-a-year Mayfair apartment where he "conducted negotiations" with Edwards. His multimillion pound spending spree included an impressive office in the same area, and a garage of upmarket cars, including a Range Rover with the number plate 5 AVE, a Bentley and a Porsche.

Brown, who was last known to live in Hampstead, north-west London, also splashed out £2.5m on a private jet, £400,000 on an ocean-going yacht and £327,000 on an entertainment system for his home in Majorca. According to Edmunds, Brown "simply used [investors'] money as his own".

He added: "After all, he had a front to maintain. It is the old story - if you tell a big enough lie, people swallow it."

Following the donation to the Liberal Democrats - which he channelled through a company called 5th Avenue Partners - he flew in a private plane with Charles Kennedy and dined with other senior Lib Dem figures. Although the Electoral Commission decided it was "reasonable" for the party to regard his seeming generosity as "permissible", Brown's conviction for theft and other offences is likely to prove very embarrassing for the Lib Dems. It could also provoke renewed calls for the donation to be returned.

After the case a party spokesman said: "All our donations from 5th Avenue Partners were received in good faith and were properly spent on the general election campaign. Our auditors have seen our legal advice on this matter and confirmed that we do not need to make provision in relation to this matter."

Brown will not be sentenced until he is caught. Yesterday Detective Sergeant Nigel Howard, of City of London police, said: "Brown tricked investors into handing over millions of pounds and has been trying to escape justice ever since. It is time he faced up to his crimes and handed himself in to the authorities."

The Electoral Commission later said it was resuming its investigation into Brown's donations to the Liberal Democrats. "We are now able to resume our investigation which had been suspended at the request of the prosecuting authorities," a spokesman said. "Our investigation concerns the permissibility of donations accepted by the Liberal Democrats in 2005."